CTM80270 - Groups: group relief: apportionment of profit or loss: apportioned amount not to exceed total loss

ICTA88/S403B

The amount to be apportioned under Section 403B is the profit against which group relief is to be allowed or the loss or other amount to be surrendered. The amount that is apportioned to an overlapping period cannot exceed this profit, loss or other amount.

Where the company is a claimant company, the amount to be apportioned is the profits of the accounting period against which group relief may be allowed ( CTM80230). An accounts based apportionment may have the effect of apportioning more than the profits of the accounting period to an overlapping period. If so, the whole of the profits, and no more, is apportioned to the overlapping period for which the result is a profit.

Where the company is a surrendering company, and the amount to be surrendered is excess management expenses, charges, Schedule A losses or non-trading losses on intangible fixed assets, the amount to be apportioned and set off against the claimant company's profits is the excess of the respective amount over profits ( CTM80140 excess management expenses, CTM80130 excess charges, CTM80135 Schedule A losses, CTM80141 non-trading losses on intangible fixed assets).

Where the amount to be surrendered is excess capital allowances ( CTM80120) the amount to be apportioned and set off against the claimant company's profits is the excess of allowances over income from a qualifying activity of special leasing.

If there is no excess of, say, charges over profits for the accounting period there is no possibility of apportioning charges to an overlapping period. If the amount of the loss (or excess management expenses etc) apportioned to an overlapping period exceeds the loss etc for the whole accounting period, the whole of the loss etc. but no more, of the accounting period is apportioned to the overlapping period.